The biggest driver of customer loyalty is not, after all, the things you may think, like ‘value for money’, ‘customer service’, range of choices’ and so on.
No…recent research shows that we actually judge our suppliers by the speed, effort and willingness with which they handle our complaints.
In fact it such an important factor, that any customer who has had a problem with your business which you have willingly fixed to their entire satisfaction is almost always more loyal afterwards than a customer who has never had a problem. (even if we feel the customer was really to blame).
This new appreciation of the importance of after-sales service comes from an academic study by the Customer Contact Council which has found that customer loyalty is not created by delighting the customer with your general service levels. Your customer’s loyalty is based on how little effort they have to put in to getting their complaint or dissatisfaction dealt with satisfactorily.
The Council has devised something they call the Customer Effort Score (‘C.E.S.’)which has a 1-5 scale when this question is asked of customers: “ How much personal effort did you have to put in to get your request satisfied by your supplier?” (1= Very little effort 5= Maddeningly massive effort !)
Even a small reduction in effort is translated into a much greater increase in loyalty and by default ‘revenue’. On the other side an increase in ‘effort required’ has a 4 times greater ‘negative’ effect. Customers who have to put in a high amount of effort are 61% less likely to purchase again compared with your ‘average’ customer.
True (current) story: Right now I am waiting for the gardening company, who keep my home garden in check on a fortnightly (two-weekly) basis, to resolve two simple queries. They are ‘easy fixes’ on work carried out (or not) in this case. The owner of the company could say (after 10 years of a satisfactory –customer delight- relationship and lots of my money): ”Look I don’t know who’s right or wrong here but why don’t we just forget about the disputed charges and carry on as before?”
I would be perfectly happy with that. And would tell my next door neighbour how happy I was.
But, in fact, the issue has now been dragging on for three weeks while they ‘look into’ my complaints. (The owner is clearly more concerned with proving that he is ‘right’ than of retaining my custom. His employees completing the contract are aware of the dispute and have discretely told me that he actually ‘gets off’ on winning such customer disputes). I have made several ‘chasing’ phone calls to their office. I am still expending a great deal of effort with no conclusion in sight. I am not happy. If it doesn’t get resolved I will cancel their contract and go with a competitor. They will lose a loyal 10 year customer and all that future revenue. I will get a new gardener. In just about any market including yours there is no shortage of competitors.
How different from my local branch of a well known off-High street electronics/Hifi company in the UK “Richer Sounds”. They have a wonderful notice over their counter:
“Rule number 1: In this store The Customer is Always Right.
Rule number 2: When The Customer is wrong….see Rule number 1.”
No wonder the “Richer Sounds” chain is recorded as currently being the most profitable ‘per square foot’ retailer in the UK!
So, do you run a business (gardening or otherwise)? Do you know your own CES score? Do you care….or is your main motivation winning a dispute at all costs? “That’ll show him!” If you actually enjoy exasperating people more than increasing the size of your bank balance here are….
….8 simple ways you can immediately start to annoy your customers….
Take too long to fix a problem
Fail to keep your promises
Care more about proving you’re ‘right’ than solving their complaint
Transfer them from department to department while you play music at them
Fail to respond to their phone calls and left messages
Hold customers in uninformed suspension for days
Ask them for more business while this current problem is still unresolved.
Ensure that the ‘Support’ facility or ‘Chat’ window on or off your website completely inadequate
And the 1 easy way to make them come back for more:
Next time a customer raises a query or complaint, who ever’s ‘fault’ you ‘think’ it is, try saying this:
Magic Words: “I’m so sorry to hear that Mr Customer. What can I do to put things right immediately?”
Then just do it.
You’ll be amazed at the resulting happiness and loyalty. Remember…you’re not there to prove you’re ‘right’…you’re there to do more business.
Health Warning If you’re reading this and are a manager and owner of a business you might be saying to yourself: “Hey…this is not aimed at me and my business…we have great systems in place….all is well”. OK then, I challenge you to be a mystery shopper. Call your own after-sales line as if you were a customer and see how they deal with your question or query. As with one of our suppliers recently the CEO (When we finally got to speak to him) was shocked to find that we had had a query which nobody in his company (from lowly office worker to Main Board Director) had even begun responding to, for over 18 months!
Lesson: It is 80% easier and 80% less expensive to get more business from an existing happy customer than to go out and find a single new one.
“Europe’s Best Sales Trainer” : [Voted by ‘Sales Innovation Expo’ 2015 and 2016, Excel London.]